DECISION

Fair Work Act 2009
s.157—FWC may vary etc. modern awards if necessary to achieve modern awards objective

Annual Wage Review 2019–20 —National Training Wage
(AM2020/96)

Annual Wage Review 2019-20 – consequential variations – National Training Wage – reference to Miscellaneous Award 2020.

[1] This decision deals with consequential variations to modern awards arising from the 2019–20 Annual Wage Review decision 1. The variations deal with an issue that relates to the operative dates for wage increases for employees covered by the National Training Wage (NTW).

Background

[2] The Fair Work Act 2009 (Cth) requires the Fair Work Commission, constituted by an Expert Panel for annual wage reviews (the Panel), to conduct and complete a review of the national minimum wage (NMW) and modern award minimum wages in each financial year (the Review). The Panel must make a NMW order and may set, vary or revoke modern award minimum wages.

[3] The 2019–20 Review was undertaken during the COVID-19 global pandemic. As the Panel noted in the 2019–20 Annual Wage Review decision at paragraphs [2] and [41]:

‘[2] The outbreak of the coronavirus, COVID-19, and the measures put in place to contain the spread of the virus have led to significant shifts in the way work and society is conducted, with substantial economic consequences …

…

[41] The impact of the COVID-19 pandemic has been felt across the economy; but the extent of its impact has not been consistent across all sectors of the economy. While some industries have been substantially affected, other sectors have been affected to a much lesser extent.’

[4] In the 2019–20 Annual Wage Review decision the Panel decided it was appropriate to increase modern award minimum wages by 1.75 per cent, but determined that different operative dates would apply to three groups of awards as follows:

[5] The awards allocated to each group are set out in the 2019-20 Annual Wage Review decision at paragraph [466].

[6] The majority set out the reasons for the operative dates at paragraphs [162]-[164] and [166] of their decision as follows:

‘[162] The modern awards in Group 1 cover industries which have been less affected by the pandemic than those covered in Groups 2 and 3, and includes modern awards applying to “frontline” health workers, teachers and childcare workers and employees engaged in other essential services, who have continued working throughout the pandemic, to keep the community safe; to protect the vulnerable and those at risk; and to keep the economy functioning. The variation determinations in respect of these awards will come into operation on 1 July 2020. We estimate that about 25 per cent of non-managerial award-reliant employees are covered by the modern awards in Group 1.

[163] The modern awards in Group 2 cover industry sectors adversely impacted by the pandemic, but not to the same extent as the sectors covered by the Group 3 awards. These are the awards in the central cluster. We are satisfied that there are exceptional circumstances justifying the variation determinations in respect of these modern awards coming into operation on 1 November 2020. We estimate that about 40 per cent of non-managerial award-reliant employees are covered by the modern awards in Group 2.

[164] The modern awards in Group 3 cover the industry sectors which have been most adversely affected by the pandemic. These are the modern awards that mostly apply to employers and employees that operate within industries located in the upper cluster. We are satisfied that there are exceptional circumstances justifying the variation determinations in respect of these modern awards coming into operation on 1 February 2021. We estimate that just over one third of non-managerial award-reliant employees are covered by the modern awards in Group 3.

…

[166] The categorisation of modern awards into the 3 groupings set out above is based on the data set out earlier; the restrictions imposed to contain the COVID-19 virus (set out in detail in Appendix 1); and the submissions. We acknowledge the limitations of the data and accept that the categorisation is imperfect. But on the information available we are satisfied that the operative dates we have determined are justified.’

[7] We now provide a brief explanation of how the NTW Schedule is currently given effect in modern awards.

[8] In a decision issued on 9 June 2017 2 (the June 2017 decision) the National Training Wage Full Bench3 proposed that the NTW Schedule be standardised across modern awards. The Full Bench removed the NTW Schedule from the majority of modern awards and re-incorporated the NTW Schedule back into the majority of awards by reference to the NTW Schedule in the Miscellaneous Award 20204 (the Miscellaneous Award). Determinations were issued and the change came into operation on 1 July 2017.

[9] An example of the term that appears in the majority of modern awards incorporating the NTW Schedule by reference to the Miscellaneous Award (the ‘NTW incorporation clause’) is set out below: 5

‘X. National training wage

X.1 Schedule E to the Miscellaneous Award 2020 sets out minimum wage rates and conditions for employees undertaking traineeships.

X.2 This award incorporates the terms of Schedule E to the Miscellaneous Award 2020 as at 1 July 2019. Provided that any reference to “this award” in Schedule X to the Miscellaneous Award 2020 is to be read as referring to the [award title] and not the Miscellaneous Award 2020.’

The issue

[10] An issue arises regarding the timing of the increases to the NTW rates as incorporated into the majority of modern awards from Schedule E to the Miscellaneous Award and the different operative dates for increases to rates in award groups 1-3 determined in the 2019–20 Annual Wage Review decision.

[11] The 2019-20 Annual Wage Review decision states:

‘the adjustment to modern award minimum wages will flow through to employees to whom training arrangements apply in modern awards, including the rates under the National Training Wage Schedule.’ 6

[12] As outlined above at paragraph [8], the majority of awards incorporate rates and conditions for NTW employees from the Miscellaneous Award. The Miscellaneous Award is a Group 2 award for the purposes of the 2019–20 Annual Wage Review. That means the rates in the Miscellaneous Award (including in Schedule E—National Training Wage) will increase on 1 November 2020. The rates in the Group 1 awards increased on 1 July 2020 and the rates in the Group 3 awards will increase on 1 February 2021. The effect of all of this would be that NTW employees would receive a wage increase on 1 November 2020, when the rates to the Miscellaneous Award are increased, regardless of whether other employees in their industry or occupation would receive an increase at that time.

Group 1 awards

[13] The issue as it relates to Group 1 awards was rectified when the Annual Wage Review 2019-20 determinations were issued in June 2020. The determinations for Group 1 awards inserted a standard clause into the NTW incorporation clause. The standard clause inserted into Group 1 awards is set out below: 7

‘For employees covered by this award undertaking traineeships, the minimum rates in Schedule E to the Miscellaneous Award 2020 as at 1 July 2019, are increased by 1.75% from 1 July 2020.’

[14] The Group 1 awards published on the Commission’s website were updated with a link to a webpage containing a version of Schedule E to the Miscellaneous Award with the updated rates, and a note was inserted into these awards as follows:

‘NOTE: The minimum rates from 1 July 2020 for employees covered by this award undertaking traineeships are published on the Commission’s website.’

[15] The clause and note inserted into the Group 1 awards will no longer be needed when the rates in Schedule E to the Miscellaneous Award are increased on 1 November 2020. The clause and note will therefore be deleted from the Group 1 awards. A variation determination deleting the clause will be issued with this decision. A list of affected Group 1 awards and the relevant clause numbers is at Attachment A to this decision.

[16] A further amendment to the Group 1 awards is required. The NTW incorporation clause in the Group 1 awards currently refers to the terms of the Miscellaneous Award as at ‘1 July 2020.’ The variation determination will amend this to refer instead to ‘1 November 2020’. The amended clause will appear in the Group 1 awards as follows:

‘This award incorporates the terms of Schedule E to the Miscellaneous Award 2020 as at 1 November 2020. Provided that any reference to “this award” in Schedule E to the Miscellaneous Award 2020 is to be read as referring to the [award title] and not the Miscellaneous Award 2020.’

Group 3 awards

[17] The issue as it relates to Group 3 awards is slightly different. Wages in the Group 3 awards (including the rates for employees covered by the NTW provision) are not to increase until 1 February 2021; however, the NTW rates in Schedule E to the Miscellaneous Award will increase on 1 November 2020. The effect of this would be that NTW employees would receive an increase in rates before non-NTW employees under the same award.

[18] The existing NTW incorporation clause in the Group 3 awards will be correct until 1 February 2021. However, after Schedule E to the Miscellaneous Award is updated on 1 November 2020, the rates that were contained in Schedule E as at 1 July 2019 will not be readily accessible.

[19] To address this issue, a temporary note will be inserted into the NTW incorporation clause in Group 3 awards, to direct users to the rates in Schedule E to the Miscellaneous Award as at 1 July 2019. These rates will be published on a separate webpage on the Commission’s website. The temporary note will read as follows:

‘NOTE: The minimum rates from 1 July 2019 for employees covered by this award undertaking traineeships are published on the Commission’s website. These rates will increase on 1 February 2021.’

[20] A list of effected Group 3 awards and the relevant clause numbers is at Attachment B to this decision.

Next steps

[21] Variation determinations for the Group 1 awards and the Group 3 awards will be issued with this decision.

[22] The temporary note that is to be inserted into the Group 3 awards (see [19] above) will need to be deleted on 1 February 2021. A separate decision and variation determination will be issued at that time.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR723825>

Attachment A

Group 1 awards

Attachment B

Group 3 Awards

 1   [2020] FWCFB 3500.

 2   [2017] FWCFB 3176.

 3   AM2016/17.

 4   Previously the Miscellaneous Award 2010

 5   [2017] FWCFB 3176.

 6   [2020] FWCFB 3500 at [431]

 7   See PR718933 item 5 by way of an example.